Micro HW 3

Assume for Brazil that the OC of each cashew is 100 peanuts. Which of these pairs of points could be on Brazil's PPF

(200 cashews; 30,000 peanuts) and (150 cashews; 35,000 peanuts)

Suppose a gardener produces both tomatoes and squash in his garden. If he must give up 8 bushels of squash to get 5 bushels of tomatoes, then his OC of 1 bushel of tomatoes is:

1.6 bushels of squash

Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs. Given this, we know that opportunity cost of 1 chair is

1/6 table for Ken and 1/3 table for Traci

Assume the United States and Australia have the same amount of resources. In a given time, the US can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that,

The US has an absolute advantage in both beef and cars

The United States is capable of producing many goods and services that it imports, but it does not because

We can import those goods at a lower opportunity costs than if we make them ourselves

Abby bakes brownies and Liam grows flowers. In which of the following cases it is impossible for both Abby and Liam to benefit from trade

Abby does not like flowers and Liam does not like brownies

Which of the following countries has the highest export ration?

Belgium

When a country has a lower OC in producing a good than any other country,

Consumption possibilities will increase with specialization and trade

A country has a comparative advantage in a good if,

It can produce a good at a lower opportunity cost relative to another country

When one country can produce a given amount of a good using fewer inputs than any other country

It has an absolute advantage in producing the good

Without trade, a country's consumption possibilities are

Limited to its domestic production possibilities

When comparing the ration of trade to GDP, relative to other countries, the United States typically has

Lower ratios for both imports and exports

Two countries will have zero incentives to trade if their production possibilities curves are parallel straight lines because

The opportunity costs for both countries are the same